Alabama's Chief Education Financial Officer Andy Craig warned state superintendent Michael Sentance last April that the department was on a "path of financial deterioration and insolvency if adjustments are not made."

The memo, obtained through a records request, outlined what Craig said were "serious concerns" he had about that path and laid out four recommendations he had for a long-term fiscal plan.

Those four recommendations, including a hiring freeze for the state department, were implemented a couple of weeks later, department-wide. The remaining three recommendations were focused on how to contain personnel costs.

State board members began publicly asking questions about the department's budget earlier this year, concerned about how many positions Sentance added to the department, according to board member Cynthia McCarty, R-Jacksonville.

Board of education Vice President Stephanie Bell, R-Montgomery, told AL.com in an emailed statement, "Board members have been diligent about asking questions and requesting information. The budget discussion was on the August Special Called work session because board members requested the information for discussion."

Following the discussion, it was unclear whether the $8 million deficit was an projection or depicted that way due to accounting methods.

Board members alternately expressed their concern about the department running a deficit.

Craig said that deficit amount depended on a lot of things, and included costs for unfilled positions, not accounted for in the previous year's figures due to this year's change in accounting methods.

Craig explained that all positions, filled and unfilled, are on the books at the beginning of the year, just as shown in the proposed budget, but if those positions go unfilled, that money is generally moved to other areas within the department, which is why they aren't shown in the 2017 numbers.

It is a common practice, Craig said, or else the money could revert to the state or federal government providing the funds.

After the work session, Craig told reporters the deficit isn't a sure thing. "There are a lot of moving parts to this," he said.

"We're in a position to essentially balance [the budget] because we have positions that are unfilled," Craig said. "If we don't fill the positions, then we're at zero basically."

When asked if the department had run deficits before, Craig said, "In the past, at times, yes."

In previous years, Craig explained, there were funds available to be spent from a shared services account, which, is funded primarily by indirect cost charges to federal and state programs that the department administers.

Money from that fund was used to cover department costs, Craig said, but that fund balance has declined in recent years.

Also, Craig said, the way those indirect costs are calculated has been declining through the years, putting pressure on the department's budget.

"We've reached a point in my mind," Craig told the board, "where the computation of an indirect cost and what would be required to bring into this operations and maintenance fund is not rational anymore."

That change in the shared services fund accounts for part of that deficit, Craig said. The department is changing its method for displaying those indirect costs, and that accounts for the way the deficit appears, too, Craig said.

Craig told the board he changed the entire chart of accounts for the department effective at the beginning of fiscal year 2017, or Oct. 1, 2016.

The restructuring of the state department put in place recently under Sentance has changed the chart of accounts again, Craig said, making some of the budget documents difficult to follow.

Craig has held the job of Chief Education Finance Officer since January 2015, hired by former superintendent Tommy Bice. Craig replaced long-time finance head Craig Pouncey, who has been the superintendent in Jefferson County schools since 2014.

Contacted, Tuesday evening, Pouncey said the department did not run a deficit while he was the chief financial officer.

AL.com has submitted a records request for previous years of the department's budget documents and has not yet received those requests.

The budget process is continuing, Craig said in a statement to AL.com: "Meetings with department heads are ongoing as we work towards finalizing a starting budget for 2018."

Craig said he expects the board to vote on a department operating budget for 2018, something he couldn't say whether had been done in the past but is required under state law based on research he conducted last year.

The board voted in February to approve the fiscal year 2018 budget, and it's unclear at this point if a second vote is needed. Craig told board members he plans to bring the 2018 budget back to them for a vote.

Bell told AL.com the board has voted every year on the department's budget as a part of the request sent to the legislature for all K-12 appropriations.

A search of official Minutes shows no record of a vote for the fiscal year 2017 budget, and only a vote for "budget priorities" for the fiscal year 2014 budget. The board voted to approve a "preliminary budget" for fiscal year 2016.

The board meets again on Sept. 14, but it is unclear whether a vote will be held at that time as an agenda has not yet been released.

Board member Jeff Newman, R-Millport, told AL.com in August that a vote could be held to fire Sentance at their next regular meeting. Gov. Kay Ivey, who serves as president of the board by virtue of her office, will attend the Sept. 14 meeting, according to her spokesperson.